Colorado Republicans have pounced on statements that Governor Hickenlooper made on Colorado Public Radio yesterday regarding the individual mandate. Although Governor Hickenlooper did not say that he’s opposed to the individual mandate, he expressed his belief that he doesn’t “think you have to mandate it if you craft it properly.” Since the individual mandate is without a doubt the most controversial aspect of the ACA, the governor’s words will be significant for both sides of the debate. A spokesperson for the governor’s office noted that Hickenlooper was discussing a hypothetical situation that could arise if the Supreme Court strikes down the individual mandate next month but leaves the rest of the ACA intact. Colorado has already done quite a bit of work on the state’s health benefits exchange, but the exchanges are currently being based on the assumption that health insurance will be mandatory in 2014. If the Supreme Court does away with the individual mandate but keeps the rest of the ACA, it will be a challenge for states to create health benefit exchanges that can operate efficiently without an individual mandate.
I understand exactly where Governor Hickenlooper is coming from. If the states are left to create health benefit exchanges without an individual mandate, they will need some new strategies to get as many people as possible into the health insurance pool. I agree with the governor that if you can make health insurance attractive enough and affordable enough, people will buy it without a mandate. But everyone’s definition of “affordable” is different, and unfortunately it might be quite a challenge to create a health insurance market that has guaranteed-issue coverage and premiums that are affordable enough that everyone (or nearly everyone) will simply choose to purchase coverage without a mandate.
We’ve seen numerous studies that indicate that the primary reason uninsured people are without health insurance is the cost of the premiums. The ACA includes a generous subsidy program that will apply to families with incomes up to 400% of the federal poverty level, and that should be a significant help in terms of making health insurance more affordable. If underwriting were to remain the same as it is now (ie, you have to obtain health insurance before you need care rather than after you have a pre-existing condition), and subsidies were to also be implemented, I imagine that a lot more people would obtain health insurance. The financial incentive (in the form of lower premiums thanks to subsidies) would be there, and so would the potential negative consequences of not obtaining health insurance, since we never know when a situation could arise that would be considered a “pre-existing” condition and might hinder our ability to obtain health insurance in the future.
But if individual health insurance becomes guaranteed-issue, the perception of the value of health insurance might change, especially if there’s no individual mandate. And guaranteed-issue health insurance with no method of enforcing membership in the pool of insureds can quickly lead to out-of-reach premiums. Individual health insurance is scheduled to be guaranteed-issue starting in 2014 (assuming that the Supreme Court allows the bulk of the ACA to remain in place). If the court disallows the individual mandate, a significant incentive for purchasing health insurance will be removed, since people will know that they can purchase health insurance even after becoming ill or injured. I’ve seen other possible solutions to this dilemma – things like increased premiums based on how long a person has been uninsured, for example. But as of yet, we don’t have anything specific. I’m sure that if the Supreme Court strikes down the individual mandate, lawmakers will get to work hammering out some sort of carrot and stick program to incentivize people to purchase health insurance, and hopefully their goal will be as Hickenlooper stated – to “craft it properly” so that a mandate isn’t necessary.
From a purely idealistic point of view, I agree with Governor Hickenlooper’s thoughts on the subject, although I’m not as sure of the feasibility of a population-wide health insurance pool with no mandate. If the individual mandate is struck down by the Supreme Court next month, Colorado – and every other state – will have to be creative in terms of creating a health insurance pool that attracts nearly everyone without an official rule requiring people to be insured